Along with the development of the Internet and maturity of encryption technologies such as digital signature, electronic commerce has been expanding globally at a tremendous pace. Many successful companies have grown up using electronic commerce as the primary method of business operation. The new business methods developed in context of e-commerce have completely revolutionized the existing business mode.
FIG. 1 shows a schematic structural diagram of a generic example of an existing online transaction system 10. The system 10 includes merchant 11, intermediary platform 12, bankcard subsystem 13, and user 14. User 14 purchases a product of merchant 11, and makes an online payment using bankcard subsystem 13. Merchant 11 ships the product to user 14. Merchant 11 and bankcard subsystem 13 conduct account reconciliation and account remittance on a regular basis. Functions that are achieved by bankcard subsystem 13 may be integrated into intermediary platform 12.
AliPay is an example of intermediary platform 12. User 14 may open an account with AliPay, and deposit a certain amount of fund into the account through direct deposit or recharging method. If user 14 purchases a product of merchant 11, a deduction from the account is processed through AliPay. This method only requires merchant 11 to complete account reconciliation and account remittance with AliPay on a regular basis.
Intermediary transaction platform 12 may have a server center 15 and a database 16. The server center 15 is used for processing order requests, while the database 16 is used for recording each transaction in real time. Merchant 11 and bankcard subsystem 13 may check business orders regularly by visiting the database 22.
In the above transaction pattern, merchant 11 and user 14 (typically a buyer) usually reside in the same country or use the same credit system. For the purpose of illustration, if user 14 resides in China and wants to purchase a product of an online offshore merchant, the existing mode of transaction usually involves the following:
User 14 first logs in a website of an online offshore merchant 11 and submits an order request. The order request may include transaction information such as the name of the product to be purchased, price, payment method, user information including mailing address.
User 14 then exchanges RMB into a currency (US dollars, for example) accepted by the online merchant 11 at a foreign exchange service, and transfers or mail the right amount of foreign currency to an account appointed by merchant 11. Upon receiving the mail money, the online merchant 11 ships the product. If user 14 already has a sufficient amount of the required foreign currency, user 14 may send the money directly without using a foreign exchange service.
Alternatively, instead of sending the fund directly into the online merchant 11's account, user 14 may send the fund to an offshore intermediary platform such as AliPay to improve the transaction's security.
The above transaction pattern has several deficiencies. First, the buyer is required to have sufficient amount of required currency to buy an offshore product. This may incur inconvenience to buyers, especially to users in countries where obtaining foreign currency and making an international fund transfer is difficult and often restricted. As a result, the existing mode of transaction does not allow an easy online purchase of offshore products. Ideally, a buyer should not have to pay a visit to a special foreign exchange service in order to buy something online from a foreign country.
Moreover, the buyer is required to calculate an equivalent amount of local currency (e.g., RMB) to exchange for the foreign currency (e.g., US dollars). As foreign exchange rates reported by real time quote systems of different foreign exchange institutions may be different, the buyer may need to compare foreign exchange rates of various institutions in order to get a better rate in each purchase of offshore product. This may further cause inconvenience to the buyer. In many instances, a buyer may give up on purchasing a product.
Other issues that exist include the inability to directly evaluate the credibility of the merchant, the inability to assess the quality of the product, difficulties in making the return and getting a refund, and the long purchasing and shipping process.